Investors to businesses: close the innovation gap

A recent PwC survey asked 227 investors in 43 countries and territories to identify the top business priorities they consider when allocating funds. Coming in at number one, ahead of even financial performance, was innovation. That investors prize the development of innovative products, services, and ways of operating isn’t necessarily surprising, given the increasingly urgent emphasis placed on transformation in the face of climate change and supply-chain disruptions. More striking is investors’ response to a second, corollary question, which asked them how effectively they thought businesses are addressing those priorities. The chart above shows that when it comes to four of the top five priorities, the perceived level of business action more or less aligns with the level of priority. But when it comes to innovation, investors see corporate management falling short, by a lot. Closing that effectiveness gap should be a prime focus for the C-suite, and just because it addresses investors’ number one concern. Innovation can be key to satisfying other top priorities as well, like data security and emissions reduction. For fast movers, it can even open up new market opportunities.